- New management team with cloud experience
- “Designed by you” concept behind cloud software
- Previews of cloud strategy, software and team in May roadshow
Last year, after selling QuickBooks desktop accounting software for many years, Reckon decided it needed a fundamental change.
Reckon has been very successful at establishing for itself the role of a trusted guardian for accounting technology. While MYOB racks up more sales, Reckon claims more of the larger accounting firms use its practice management platform.
But in the 21st century the guardian persona is no longer enough. Dependability is suddenly less attractive than breakneck innovation, in technology and consequently accounting, driven by the arrival of internet-based (or cloud) software.
Cloud-based competitors such as Xero and global giant Intuit, owner of the QuickBooks brand, were tearing up the rulebook written by MYOB, the long-term leader of accounting software sales in Australia.
Although the company was built on desktop software, its future is undeniably in the cloud. Intuit has taken back the QuickBooks name although Reckon has perpetual rights to the source code which it has rebranded as Reckon Accounts.
A year on and Reckon is emerging slowly from its transformation. Next month Australia’s second largest accounting software company will kick off a national roadshow to give accounting partners a preview of its cloud software Reckon One, before its launch in Q3.
The impending release of Reckon One is proof, at least internally, that the company can mix it in cloud accounting.
“There’s just a lot of energy and a great vibe around the place. We feel like the underdog,” says Daniel Rabie, Reckon’s strategic director. “We are just investing so much time to make sure it’s right. Because to be fair we’re a little bit behind.”
Why did Reckon need to change?
“There was an understanding among senior management that the cloud was changing the accounting software landscape. We needed a team with energy and expertise and enthusiasm to execute effectively in the cloud world,” Rabie says.
Reckon’s partner network of accountants and bookkeepers were also telling the company that it needed a refresh.
To become a cloud player in accounting software Reckon’s transition has been deep and at times painful. Experienced leaders made way for younger blood with experience in cloud software.
Gavin Dixon, seven-year CEO of Reckon’s Business Division and CIO, was replaced by Pete Sanders, a management consultant most recently with Telstra Digital who built his own cloud project management program (BrixHQ).
Zack Levy is four months into running the hosted division which includes cloud operations. He previously worked with Dimension Data’s cloud business unit and was chief commercial officer of Bluefire, a pioneering software-as-a-service provider acquired by Dimension Data.
Internal promotions raised up new talent. Brian Coventry stepped down from CEO of Reckon’s professional division (which sells Reckon’s APS practice management software) for APS national sales manager Sam Allert.
Nigel Boland was promoted to CTO from a development role at APS and Jo Lobb moved from enterprise sales to head up the business division for accountants. Rabie, son of Reckon CEO Clive Rabie, spent several years establishing Reckon’s UK operations before returning home to Australia.
Gerald Chait continues as group general manager of marketing.
“What’s come out of this new team is we’re a month away from releasing something we’re really proud of,” Rabie says. “It’s been blood, sweat and tears to get us here.”
Staff changes weren’t limited to management. The company has reinforced its development team by investing heavily in cloud-software and user-experience experts, Rabie says. (Xero has made the user experience and user interface a selling point for its “beautiful” accounting software.)
But the biggest transformation has been cultural. Reckon has taken on a start-up mentality, adopted the Lean Startup philosophy repeatedly proven in Silicon Valley, and has closely studied the success of cloud companies such as Salesforce.com.
“Taking a startup mentality has refreshed how we look at everything from marketing to our development cycles to our support. The way we support customers is going to be hugely different, as is the way we sell,” Rabie says.
Processes have changed and so has the way the company views itself. With MYOB owned by US private equity group Bain Capital and the arrival of US giant Intuit and ambitious New Zealand startup Xero, Reckon is claiming to be the only home-grown option in the Australian market.
Instead of a close second in a secure duopoly Reckon now sees itself as an underdog.
“People have to stop thinking about Xero as this small player. They’re a billion dollar company. We’re the little Aussie battler. The advantage we have is that we’re going to be quite nimble and close to customer feedback,” Rabie says.
But Reckon isn’t about to forsake its roots, Rabie says. The startup attitude is about reinventing the way it makes accounting software, while holding onto its professionalism.
Reckon the accounting geek wants some programming cred.
“We are not trying to be culturally like Xero and change into a tech startup,” Rabie says. “We’re not the cool kid and we don’t want to be the cool kid. We’re the kid in class you can trust to come through with the goods.”
Reckon has the difficult role of convincing its base of traditional law firms that the future lies in cloud accounting software. Although Reckon will continue to sell and support desktop software and its hosted service, the company is only developing for the cloud.
Bringing firms into the cloud is going to be a case by case scenario, Rabie says. Reckon’s relationships with its accountants and bookkeepers is one of four areas of investment this year.
“Some [partners] say [our relationship has] been fantastic and some will say it hasn’t been, and we need to reinvest in that,” Rabie says. “I can’t understate how much effort we’re putting into that. When one FaceBook request comes in from a partner you have four mangers running around for the best answer.”
The other three areas of focus are culture, selling three options (hosted, desktop and cloud), and “design by you”, the theme for its cloud software.
Reckon believes all four play to its strengths. Reckon has generally enjoyed loyalty from its partners due in part to its cultural closeness to accounting firms. This has bought the company time while it has sorted out its cloud strategy.
No other vendor delivers cloud, desktop and hosted options, according to need. Reckon partners can sell desktop software to businesses with poor or no internet reception, or hosted solutions to big businesses that want to stop paying for servers without having to reskill staff.
The fourth area, its cloud software, is unproven. Rabie says the Reckon One concept revealed at the May roadshow will be unique.
“The next stage of the cloud is ‘design by you’,” Rabie says, but refuses to give further details. A mystery product unrelated to Reckon One will be released at the roadshow, “the big surprise of the day”.
Rabie admits Reckon One will be slightly behind the pace in features at launch but that the roadmap will see it “get beyond competitors fairly quickly”, Rabie says.
Reckon has been working on its own best-practice approach for accounting in the cloud. It is even challenging the “single ledger” philosophy promoted heavily by Xero and now MYOB with its own version, “feels like one ledger”.
Reckon’s accounting strategy has been developed through its APS customers which include most of the top 200 accounting firms and the Big Four.
“There have been a lot of theories in the market about best practice but we believe that what we bring to market is going to be more progressive,” Rabie says. “One ledger is a great concept but has some holes.”
Rabie hints that prices in cloud accounting software may come under pressure. Xero is too expensive for many businesses, especially those with holding companies.
Ultimately, Rabie’s message is that this cloud accounting fight is not over – it’s only beginning. Reckon has done some soul searching, worked on its game plan and is coming out swinging.
“People need to give Reckon a go. Come and see the roadshow and see what we’ve got,” Rabie says. “It’s an opportunity to see the new management team up on stage and judge our cloud ambitions after that.”
Reckon’s roadshow launches on 21 May in Melbourne.
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Image credit: Reckon